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nolanm
Level 4
03-24-2024
12:38 PM
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Hi - first time wrestling with a 1031 exchange. My client is the in-kind property given up.
In the Summary worksheet B and H are for mtg/liability assumed and relinquished. Is it accurate to enter the mortgage paid off on the property given up and the new mortgage taken out? I am confused by the word "assumed".
The above treatment results in a taxable gain on portion of the exchange. This may make sense as the property acquired in the swap is of higher value, and a higher mortgage was taken out than that which was relinquished ie. my client put less equity into the deal than the counterparty.
But the closing statement from the 1031 lawyer shows a very small boot ie. near break-even on the deal. Would this statement usually detail the taxable portion of the structure?
Thanks for any pointers Nolan
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